Home » 3PL/4PL, Breaking News » Ceva achieves revenue growth in 2018, confirms medium-term targets

Swiss-based Ceva Logistics reported growing its full-year revenue while significantly reducing its debt last year, as it confirmed its medium-term targets through 2021.

In a statement, Ceva said revenue increased by 5.2% to $7.356 billion in 2018 compared to previous year. EBITDA was $198 million last year with an EBITDA margin of 2.7%.

However, EBITDA has been negatively impacted by various one-time events including contract logistics issues in Italy as well as some changes in accounting estimates in the fourth quarter reflecting a more conservative approach from management.

Without these events, adjusted EBITDA in 2018 would have been about $54 million higher. Furthermore, currency translation into U.S. dollars negatively impacted EBITDA by a further $9 million in 2018.

Adjusted EBITDA in 2018 amounted to $260 million, including $62 million representing Ceva’s 50% share of EBITDA from the Chinese joint venture Anji-Ceva.

“Ceva finished the year with sound commercial performance in 2018. Margins have been impacted by one-time costs, in particular Contract Logistics in Italy,” confirmed Xavier Urbain, CEO of Ceva Logistics.

Meantime, net debt was down to $1.192 billion as of December 31, 2018, representing a significant decrease of 43% compared to $2.089 billion a year earlier.

Group revenue in freight management increased by 7.3% to $3.508 billion in 2018, with good volume growth in ocean, up 7.9% year-on-year ahead of market. Ceva’s freight management operations have felt limited impact from the U.S.-China trade tariffs discussion. Air volumes slightly decreased by 0.7% year-on-year, mainly from the earlier loss of certain customers and a selective approach to new business.

EBITDA in freight increased significantly year-on-year by $17 million to $93 million in 2018 resulting from better revenues, productivity actions and improvements in valued-added services operations, partly offset by challenges in North America due to driver shortages.

Meanwhile, revenue in contract logistics increased by 3.3% to $3.848 billion in 2018. The company handled good volumes in existing contracts and there was successful implementation of new business, reported Ceva.

Contract logistics EBITDA was nevertheless down by 31.8% to $105 million for 2018. This as two contracts in Italy and the bankruptcy of a local partner for temporary staff resulted in additional unplanned costs of $42 million in 2018.

In addition, EBITDA performance has also been impacted by a conservative change in accounting estimates resulting in additional expense of $10 million in 2018. In total, $52 million one-time additional costs have impacted contract logistics.

In 2018, revenue at Anji-Ceva Joint Venture (owned 50% by Ceva) amounted to $1.4 billion, an increase of 23.7% compared to 2017 in constant currency. This healthy revenue growth was fuelled by a strong increase in volume of existing contracts, new implementations and the transfer of Ceva’s contract logistics business in July 2017.

EBITDA for 2018 was up $22 million in constant currency to $124 million, including a capital gain on an asset disposal for $28 million, compared to a capital gain of $12 million in the same period of 2017.

Looking ahead, Urbain said that with support from partner CMA CGM, the organization is on track to accelerate its transformation and turnaround action plan in the next three years and beyond.

Ceva’s revenue target for 2021 is pegged at above $9 billion, reflecting a 5% average annual organic growth and the contribution of CMA CGM Logistics of $630 million, he said.

Adjusted EBITDA is set at $470 million to $490 million which corresponds to an EBITDA margin of 4.5% to 5%, he added.

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